Coca Cola 2005 Annual Report Download - page 95

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THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11: HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS (Continued)
The following table summarizes activity in AOCI related to derivatives designated as cash flow hedges held
by the Company during the applicable periods (in millions):
Before-Tax Income After-Tax
Amount Tax Amount
2005
Accumulated derivative net losses as of January 1, 2005 $ (56) $ 22 $ (34)
Net changes in fair value of derivatives 135 (53) 82
Net gains reclassified from AOCI into earnings (44) 17 (27)
Accumulated derivative net gains as of December 31, 2005 $ 35 $ (14) $ 21
Before-Tax Income After-Tax
Amount Tax Amount
2004
Accumulated derivative net losses as of January 1, 2004 $ (66) $ 26 $ (40)
Net changes in fair value of derivatives (76) 30 (46)
Net losses reclassified from AOCI into earnings 86 (34) 52
Accumulated derivative net losses as of December 31, 2004 $ (56) $ 22 $ (34)
Before-Tax Income After-Tax
Amount Tax Amount
2003
Accumulated derivative net losses as of January 1, 2003 $ (15) $ 6 $ (9)
Net changes in fair value of derivatives (165) 65 (100)
Net losses reclassified from AOCI into earnings 114 (45) 69
Accumulated derivative net losses as of December 31, 2003 $ (66) $ 26 $ (40)
The Company did not discontinue any cash flow hedge relationships during the years ended December 31,
2005, 2004 and 2003.
NOTE 12: COMMITMENTS AND CONTINGENCIES
As of December 31, 2005, we were contingently liable for guarantees of indebtedness owed by third parties
in the amount of approximately $248 million. These guarantees primarily are related to third-party customers,
bottlers and vendors and have arisen through the normal course of business. These guarantees have various
terms, and none of these guarantees is individually significant. The amount represents the maximum potential
future payments that we could be required to make under the guarantees; however, we do not consider it
probable that we will be required to satisfy these guarantees.
In December 2003, we granted a $250 million standby line of credit to Coca-Cola FEMSA with normal
market terms. As of December 31, 2005 and 2004, no amounts have been drawn against this line of credit. This
standby line of credit expires in December 2006.
We believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas
covered by our operations.
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